Recommendations Please

[miner1000]

I have received a small lump sum - enough to purchase about one full unit of a share to add to my portfolio.

My current holdings are:-

Aberdeen Asset Management
Amec
Aviva
Astrazeneca
Balfour Beatty
British Land
British Aerospace
Berkley Group
Carillion
Centrica
Diageo
First Group (half holding)
Glaxo
Imperial Brands
Inmarsat
Lloyds Banking
Morrison
National Grid
Numis Corp
Pennon
Pearson
RDSB
RSA
Schroders Non-Voting
SSE
Tate
Tesco
Unilever
Vodafone

I am thinking of adding Legal and General but would appreciate the board's view on what they think is good value at the moment. I dont plan to sell any of my holdings as I am retired and spend most of income received.

Grateful for your suggestions. Thanks in advance.

Miner

[monabri]

Don't think you'll go far wrong with Legal and General! LGEN
They will go ex dividend at the end of April so you'd get some income at the start of June.

I'm slightly overweight with LGEN but I'm tempted to ' add more" come the new tax year.

You've effectively already got a holding in Standard Life (assuming the "merger", cough, goes ahead).

[idpickering]

Hi mIner1000,

Nice array of holdings on display there. Legal & General (LGEN) would fit in nicely I think.

FWIW. Admiral Group are my latest newbie to my HYP. Others for consideration for you going forward are BT Group (BT.A), British American Tobacco (BATS), BP (BP.), HSBC (HSBA), Provident Finance (PFG), Rio Tinto (RIO), Royal Mail Group (RMG), United Utilities (UU.).

HTH and Good luck.

Ian.

[Gengulphus]

I have a couple of minor diversification concerns about Legal & General. One is that you already have 6 financial companies in your HYP: Aberdeen, Aviva, Lloyds, Numis, RSA, Schroders. That's about 20% of its current holding count of 29, which suggests that those companies might be supplying somewhere around 20% of its capital value and dividend income as well - and 20% is my normal limit on major groups of related sectors, such as financials. The second is that if you buy Legal & General and the Standard Life / Aberdeen merger goes ahead, you'll probably be up to 3 life insurance companies in a 30-share HYP, which may similarly be pushing up against my normal 10% limit on single sectors.

That said, Legal & General has performed well for many years now - it did have a dividend cut in the financial crisis, but recovered pretty quickly and well, and frankly, expecting any financial company to have come through the financial crisis completely unscathed is a very high expectation. I.e. basically I think it's a class act from the HYP point of view, and probably worth a diversification niggle or two to get it on board.

A possible alternative is one of the pubs & brewing companies Greene King and Marston's: I prefer Greene King, but it's a close judgement call, with Marston's having a somewhat better yield but Greene King having a more solid record and (at least when I last looked, which is a few months ago) somewhat better-looking dividend safety.

Another alternative I would find perfectly acceptable is topping up a few existing holdings. How many depends on how big your 'full unit' is, you don't want to make the purchases too costly by splitting the cash too many ways. And which existing holdings to top up cannot be judged without seeing which existing holdings are underweight - so I can't make this suggestion more specific than "top up a few existing holdings"!

Gengulphus

[tjh290633]

I agree that having four insurers would be too many. Possibly two too many, although I have three (AV., ADM and LGEN).

The pub/restaurants are a sector which you don't have. I hold Marstons (MARS) which has a higher yield at 5.4% than Greene King (GNK).

You have one property REIT in British Land, and you could add another. Likewise you have one housebuilder in Berkeley (BKG), so you could double up there. I have Segro, which has a lower yield than BKG, but there are others like Primary Health Properties (PHP) with a better yield. I also have Taylor Wimpey (TW.), which yields 6.3% with its special dividends, as my only housebuilder, but you have BBY and CLLN which are both into construction, and I hold CLLN.

Given that you have scope to add diversification, I would go that way.

TJH

[77ss]

I have received a small lump sum - enough to purchase about one full unit of a share to add to my portfolio.

I am thinking of adding Legal and General but would appreciate the board's view on what they think is good value at the moment. I dont plan to sell any of my holdings as I am retired and spend most of income received.

Grateful for your suggestions. Thanks in advance.

Miner

Nothing wrong with LGEN - one of my larger holdings but, as others have pointed out, you may end up overexposed to financials. You may be relaxed about that.

It could depend on exactly how important a high yield is to you. If you can forgo a bit of income, then a miner (RIO, for me) looks like a useful diversification. Alternatively, double up on tobacco with BATS.

'Good value at the moment'? I've no idea.

[miner1000]

Thanks to those that took the time to reply. All good information. I will proceed with the purchase of LGEN and plan to add Greene King next time I have some spare cash.

Regards,

Miner